- Smart contracts are computer programs stored on a blockchain that will be executed when predetermined conditions are satisfied.
- They were first proposed by Nick Szabo in 1994.
- They use simply `if/when... then...` statements that are written into code on the blockchain.
- These actions could include:
- Releasing funds to the appropriate parties.
- Registering a document.
- Sending notifications.
- Issuing a ticket.
- Once the transaction is completed, the blockchain is updated.
- It makes the transaction very hard to hack. Hackers would have to change the entire chain to change a single record.
- Only parties who have been granted permissions can see the results.
- The terms must be agreed upon by all parties.
- They don't need a central authority, legal system, or external enforcement mechanism.
- [IBM. What are smart contracts on blockchain?](https://www.ibm.com/topics/smart-contracts)
- [Investopedia. Smart Contracts](https://www.investopedia.com/terms/s/smart-contracts.asp)